Porto Alegre, December 26th, 2024 – Those producers who planted corn in this 24/25 Brazilian summer crop maintained technology profiles because they are traditional producers of this culture. The weather, so far, remains very favorable for corn crops throughout the Center-South of the country. Information recently released from producing regions is that average yields may be above normal in the southern and southeastern states, at least. The question now is whether this finding of improved productivity can offset the reduction in area and allow for smoother flow until the 2025 second crop for domestic supply. With the arrival of the summer harvest, prices are starting to settle down regionally but they will have little time to do so until the start of the soybean crop, when logistics will likely make it very difficult for corn to move into the domestic market.
Corn exports have now reached 36.5 mln tons, including the vessel appointments already announced for January. Basically, in one week, the line-up increased by 1 mln tons. Therefore, we still believe it is possible to reach the target of 38/39 mln tons in this business year mainly due to two key factors: space in ports, since there will not be large volumes of soybeans for exports in January, and the aggressive devaluation of the real, which allows for price support in ports.
These export data, added to the closing of Brazilian domestic demand, which we will only know next March, will determine the carryover stocks for 2025. However, in any case, the first business semester, which begins in February and goes until July, will have a trajectory of attention to supply. Some points are fundamental to understand the first semester:
● Definition of carryover stocks, 8 to 10 mln tons do not change the profile of domestic supply;
● Trading decisions by producers. Brazil is experiencing a difficult and worsening credit situation in agribusiness, which may require that producers sell more and retain less in this summer crop, whether corn or soybeans. Sales decisions may facilitate regional supply for consumers by reducing price intensity. On the other hand, if there is a generalized retention, the chances of highs are big;
● Weather in the 2025 second crop. The 2025 second crop will be planted closer to the traditional window, January 20 to March 30, which leaves us with critical cropping phases
for regional climate nuances, such as the lack of rain in the Midwest and the June frosts in Paraná, for example;
● Very firm domestic demand from the animal sector and already known by the ethanol sector;
● Planting and development of the 2025 US crop, with a bias toward a small recovery of planted area;
● Exchange rate variables that may generate a posture of greater retention by producers awaiting effects on agricultural prices.
For now, the profile of the 2025 summer crop has not changed within the discreet environment of the planted area. However, the weather conditions are quite favorable at this time for summer crops, and the productivity potential must set new records. In the South, some crops are starting to be reaped for silage, others for grains, with deliveries in the first half of January. The average productivity is being forecast at 120 to 180 bags, which should generate a record regional average, if confirmed at harvest. Therefore, the beginning of the crop in the west of Rio Grande do Sul and Santa Catarina is starting to try to reduce prices due to seasonal pressure from the beginning of the harvest.
In the Southeast, weather conditions are very favorable and, as in the South, there are good possibilities for high productivity as well. The same is happening in Goiás, which has a later summer crop but also shows excellent weather conditions. There is still some uncertainty about the summer crop in Bahia, but this state has seen many plantings carried out in pivot areas and may still result in good production to be reaped from May onward.
In general, therefore, the first half of the year has tensions to be managed in the domestic environment, however, the summer crop will help to reduce, perhaps, the intensity of this price environment, depending on the producers’ trading decisions.
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